Arjun Sengupta

The struggle is towards more inclusive economic development:
Arjun Sengupta
By Rashme Sehgal
The National Commission for Enterprises in the Unorganised Sector recently declared
that 836 million Indians remain marginalised. The Commission's Chairman Arjun
Sengupta says in this interview that the maximisation of profits should not be the sole
aim of economic growth. Planning must occupy itself entirely with the improvement of
vulnerable sections of society through social engineering
An overwhelming 79% of workers in the unorganised sector live on an income of

less than Rs 20 a day, according to the National Commission for Enterprises in
the Unorganised Sector (NCEUS), chaired by Arjun Sengupta. The
Commission?s recent report, entitled ?Report on the Conditions of Work and
Promotion of Livelihoods in the Unorganised Sector? says that over 394.9
million workers (86% of the working population) belong to the unorganised
sector and work under ?utterly deplorable? conditions with ?extremely few
livelihood options?. In this interview, Sengupta discusses his seminal report on
how economic progress has bypassed the poor.
How did you arrive at the figure that over 836 million people remain marginalised
in our country?
Our data was based on National Sample Survey (NSS) studies. The NSS researches
its data meticulously at the regional, district and provincial levels. Going by its
statistics, we find that while 235 million people are in a position to take care of
themselves, an unbelievable 836 million people, or 77% of the population, require
assistance. The Planning Commission must ensure proper monitoring of funds and
schemes to help these disadvantaged groups.
The NSS data divides the poor into six groups. Those who are extremely poor, whose
average per capita consumption income is Rs 9 per day; those who are above the
poverty line, earning Rs 12 per day; the marginally poor, earning Rs 15; the vulnerable,
earning above Rs 15 but less than Rs 20; the middle income, earning Rs 37; and the
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high income, earning above Rs 93 per day.
The government has been telling us that poverty has been declining?
Yes. The numbers in the group earning between Rs 15-20 per day are expanding, but
they still remain abysmally poor.
Have all the schemes introduced to help the poorest of the poor made no
difference at all?
The finance minister has given a lot of money for social development programmes but
these have bypassed the poorest of the poor. Our report (?Report on the Conditions of
Work and Promotion of Livelihoods in the Unorganised Sector?) has stressed all along
that special programmes need to be designed for these people.
To give an example, look at the whole issue of agricultural credit. The government
keeps emphasising how agricultural credit has expanded, but it has not gone towards
helping the marginal farmer. Why shouldn?t the government waive the debts of this
distressed section? It?s not such a huge amount. We are not against reforms, but we
believe that these need to be realigned and redesigned in such a way that 50% of the
agricultural credit first reaches the poorest sector.
Therefore, the report stresses that the whole approach to planning should change. We,
at the Commission, maintain that maximisation of profits should not be the sole aim of
economic growth. Planning has to occupy itself entirely with the improvement of
vulnerable sections of society through social engineering.
Social engineering is always a difficult exercise as it requires planning, coordination,

and redesigning of programmes to make them more efficient and plug leakages. The
normal market mechanism benefits only the middle and higher income groups; for the
rest it is the government?s job to ensure economic development. The government will
have to see that reforms are not reversed, and at the same time, the socially and
economically backward must also be taken on board.
How does one achieve this?

This is the job of the finance minister and the Planning Commission. We have given
some suggestions in our report and, if these are accepted, the government will be
taking a major step forward to help marginalised people, in concrete terms. Of course,
appropriate financial planning will have to be done in order to raise the money for these
vulnerable sections. This will require some amount of tightrope-walking, because we
do not want the macro-economic balance to get upset. But I am confident the finance
minister is in a position to introduce these long-term measures.
Let us not forget that the whole thrust of the economy presently caters to the middle
and higher income groups that comprise 24% of the population and whose numbers
work out to around 225 million. They possess substantial purchasing power and
therefore do not require state assistance.
Why do you think these social development programmes went awry?

The poor have no voice and even less representation. So they were not targeted or
looked at. When an entire section of society is bypassed, how are they going to lift
themselves out of this morass? For example, if we take the thrust in agriculture or
irrigation, we will find that because there was no centralised monitoring the rich always
benefited from these schemes. Again, the majority of self-employed are in the
unorganised sector, but they have not benefited from industrial progress like skills-
upgradation and improved technology. The Commission, in its report, has given an
agenda on how to reach out to these people. But the most important thing is to provide
them with a livelihood, as many of them have no social security or legal protection.
Statistics show that among these workers, 87% are dalits and members of scheduled
castes/scheduled tribes (SC/STs), 80% belong to other backward classes (OBCs), and
84% are Muslims. Just half per cent of GDP can cover 300 million in the unorganised
sector. The money needs only to be targeted appropriately. This is not to say they do
not have any advantaged sections in this group. Twelve per cent of dalits, 20% of
OBCs and 15% of Muslims are rich.
What can be done now to reverse this social exclusion?

There is a crying need to involve local panchayats in development. The public must be
able to monitor where the money is going, and who is benefiting from it. I also believe
the government must encourage artisan cluster units at the rural level to promote the
rural economy. If Special Economic Zones (SEZs) can be justified for the rich, such
units are more justified for the poor.
Everyone keeps harping on development, but the poor have little voice?
Our job is to ensure that the situation gets reversed. In the past, they may not have
had a voice but they did have a strong individual identity based primarily on their
religion or caste. This identity is easier to comprehend. If the government gets down to
the nitty-gritty details of improving their livelihoods, these people will realise that
economic development is more important than caste or religion.
There is an impression that the government has ignored both your first and
second reports. Is that correct?
That is not correct. Our Commission has not only identified the unorganised worker but
also analysed his identity. This is the first time that such a detailed report has been
brought out that highlights the conditions of unorganised labour in the country. The
National Commission for Enterprises in the Unorganised Sector has also gone into
schemes to promote livelihoods. These are suggestions and can be improved upon
and elaborated, but the basic job was to identify the people.
Is the government going to accept these recommendations?

That is for the government to decide. Some groups support our recommendations,
others oppose them. Economics is a political subject. There are groups and lobbies
that are busy fighting one another, so we do see a lot of struggle ahead. But I will say
that, for the first time, we have a government that is committed to the development of
the poor. This is the strength of a democracy.
I cannot also say what the Bill (the Unorganised Sector Workers Social Security Bill,
2007) will do. At present, it is being considered by the Cabinet. We believe that if the
Bill is implemented with some amount of conviction, it can transform the lives of
millions of people. The National Rural Employment Guarantee Act also received a
great deal of opposition. But when the government went ahead and adopted the
scheme, it turned out to be quite successful. Voiceless groups will either assert
themselves through fighting for their rights, or else they will pick up the gun and
become Naxalites. The struggle is towards a more inclusive form of economic
development.
InfoChange News & Features, September 2007

Arjun Sengupta

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Arjun Sengupta

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The struggle is towards more inclusive economic development:

An overwhelming 79% of workers in the unorganised sector live on an income of

Social engineering is always a difficult exercise as it requires planning, coordination,

How does one achieve this?

Why do you think these social development programmes went awry?

What can be done now to reverse this social exclusion?

Is the government going to accept these recommendations?

InfoChange News & Features, September 2007

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